Group urges Trump Administration to block the sale of National Beef

Billings, Mont. – In a letter sent yesterday (May 3) to U.S. Attorney General Jeff Sessions and U.S. Treasury Secretary Steve Mnuchin, R-CALF USA urges the Trump Administration officials to block the proposed sale of the nation's fourth largest beef packer, National Beef Packing Company (National Beef), to Brazilian-owned Marfrig Global Foods (Marfrig).

Brazilian-owned JBS is currently the largest beef packer in the world and the second largest beef packer in the United States. Its bid to buy National Beef Packing Company a decade ago was blocked by the antitrust enforcement action filed in U.S. federal district court by 17 state attorneys general and the U.S. Department of Justice.

Now, according to R-CALF USA, Marfrig has followed JBS to the United States so Brazil can gain additional control over U.S. fed cattle marketing outlets and the U.S. live cattle supply chain. The sale would result in the two Brazilian firms controlling about 36 percent of the U.S. fed cattle market.

The group contends that both JBS and Marfrig are state-controlled enterprises controlled in whole or in part by the Brazilian government, which is providing resources to the companies so Brazil can become a global, beef packing powerhouse. It asserts JBS and Marfrig are cartels with histories of being bad actors, working in parallel if not together to exploit cattle producers on one end of the supply chain and consumers on the other.

The group points out that both JBS and Marfrig were previously fined for engaging in anticompetitive conduct to drive down cattle prices, R-CALF USA states that both cartel partners now stand accused of cheating on food safety and potentially causing physical harm to American consumers by bribing Brazilian food safety officials into approving the export of unsafe beef, including unsafe beef destined for America.

"Whereas the Trump Administration has determined China is threatening our economic and national security through theft of intellectual property, Brazil is similarly threatening our economic and national security by sending forth cartel partners that cheat cattle producers through anticompetitive buying practices and consumers through willful violations of basic food safety standards.

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"We respectfully urge the Committee on Foreign Investment in the United States (CFIUS) and the U.S. Department of Justice to take decisive action to prevent Marfrig from acquiring National Beef on the grounds that Marfrig demonstrates an unrepentant propensity for: i) exploiting cattle producers through anticompetitive buying practices; ii) exploiting consumers through the production and sales of unsafe beef; iii) violating basic food safety standards; and, iv) engaging in cartel behavior with JBS," the group wrote.